Interim Orders Appealable to Appellate Tribunal: Validity of Regulations Upheld

Kowa Spinning Ltd. Versus Debt Recovery Tribunal

Kowa Spinning Ltd. Versus Debt Recovery Tribunal - [2003] 45 SCL 63 (MP) (FB) Issues Involved:
1. Whether an interim order passed by the Tribunal is appealable before the Appellate Tribunal.
2. Whether Regulations 31 and 32 of the Regulations framed by the Tribunal are invalid and deserve to be declared so.
3. Whether the impugned order deserves to be interfered with in the exercise of jurisdiction under Articles 226 and 227 of the Constitution of India.

Issue-wise Detailed Analysis:

1. Appealability of Interim Orders:
The core issue was whether interim orders passed by the Debts Recovery Tribunal (DRT) are appealable before the Debts Recovery Appellate Tribunal (DRAT). The court considered Section 20 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, which provides for appeals to the Appellate Tribunal. The court analyzed the language of Sections 17 and 20 of the Act, noting that Section 17(2) allows the Appellate Tribunal to entertain appeals against 'any order' made by the Tribunal. The court referenced multiple High Court decisions, including Kavita Pigments & Chemicals (P.) Ltd. v. Allahabad Bank, which held that every order of the Tribunal is subject to appeal. The court concluded that an appeal lies against any order or an order which substantially affects the rights or liabilities of a party and is not confined to the final order alone.

2. Validity of Regulations 31 and 32:
The petitioners challenged the validity of Regulations 31 and 32 of the Debts Recovery Tribunal Regulation of Practice, 1998, arguing that these regulations curtailed the right to cross-examine witnesses. The court referred to the proviso to sub-rule 6 of Rule 12 of the Debts Recovery Tribunal Procedure Rules, 1993, which allows the Tribunal to order the attendance of a deponent for cross-examination if it appears necessary. The court also considered the Supreme Court decision in Union of India v. Delhi High Court Bar Association, which upheld the validity of similar provisions. The court reiterated that the Tribunal has the discretion to allow cross-examination when warranted. Consequently, the court held that Regulations 31 and 32 are intra vires and valid.

3. Exercise of Jurisdiction under Articles 226 and 227:
The court acknowledged that while the High Court's jurisdiction under Articles 226 and 227 of the Constitution is not ousted by the Act, it should be exercised sparingly. The court cited several Supreme Court decisions emphasizing that the existence of an alternative remedy does not bar the High Court from exercising its jurisdiction, especially in cases involving questions of law, jurisdictional errors, or violations of natural justice. However, the court found that the petitioners had an adequate alternative remedy by way of appeal to the Appellate Tribunal. The court granted the petitioners leave to file an appeal within six weeks, directing the Appellate Tribunal not to dismiss the appeal on the ground of limitation.

Conclusions:
a) An appeal against an order which substantially affects the rights or liabilities of a party lies to the Appellate Tribunal.
b) Regulations 31 and 32 of the Regulations framed by the Debts Recovery Tribunal, Jabalpur, are intra vires.
c) Despite the statutory remedy provided for preferring an appeal, in exceptional circumstances, the writ Court can exercise its jurisdiction under Articles 226 and 227 of the Constitution of India, depending on the facts and circumstances of the case.
d) A prayer for cross-examination if made in accordance with Regulation 32 of the Regulations, the Debts Recovery Tribunal may entertain the same if the circumstances so warrant.
e) The orders impugned in this batch of writ petitions do not call for interference in the exercise of extraordinary or discretionary jurisdiction of this Court under Articles 226 and 227 of the Constitution of India.
f) It would be open to the petitioners in each case to prefer an appeal before the Appellate Tribunal within a period of six weeks, and the Tribunal shall not dismiss the appeal on the ground of limitation.
g) It would be open to the petitioners to put forth their contentions before the Tribunal that the order impugned has substantially affected their rights or liabilities.
h) Any decision rendered by the High Court that runs counter to the view expressed hereinabove would be deemed to have incorrectly laid down the law and thereby stands overruled.

Disposition:
The writ petitions were disposed of without any order as to costs.